The pullback in Crude Oil has been step and deep, but our thesis for an overall recovery has not been invalidated yet. We’ve gone just below an expected Fibonacci retracement level of between 38.2-61.8%, but as long as it stays above a 76.4% level ($39.42 on the futures contract) then we are OK and should expect a reversal up soon.

Natural Gas is much clearer. In the last update we predicted support between of $2.642- $2.582 and that level held and price is now trending strongly upward with Fridays close at $2.876. All signs point to Natural Gas hitting our target zone of $3.409 – $4.318.

We had called out an entry on WMB at $22.25 and so far, this is looking like a great trade. Fridays close was $23.97 and good entries are still possible for this trade. Stop is still at $19.67 and target price is ~$34.00.

That’s it for this week. I will keep the updates coming. Be sure and let me know if you have questions or comments.

Thanks!

Dean Jenkins

MBA from the University of Washington. Dean is an expert in Technical Analysis, Money Management, Elliott Wave Analysis and founder of FollowMeTrades.com.

The Crude Oil chart is following a textbook pattern right now. 10 days ago, in my last update, I said that Oil was in a small correction and projected that it would get down to ~$45.50 – $41.50 before the next impulsive wave up begins. It made it down to that level and is sitting right on the bottom of the Ichimoku Cloud, which should provide some support. Then next move up hasn’t started yet, but it could at any time and we will have plenty of time to see it happen and be prepared. When it does start, I’ll give another update and will include some trading ideas.

Natural Gas is still in an uptrend. It has pulled back just a bit, which is normal. I am looking at an initial support level of $2.642, and if that fails, then major support at $2.582.

In the last update I pointed out WMB as a potential trade to play the Natural Gas recovery. I said that if WMB got up to $22.25, I thought that would be a good long entry price. It did hit that level and is now sitting at $23.24. I have a stop at $19.67 and a target price of $29.07. Entries are still possible on this trade at this time. It may pull back a bit, but it has what looks like good support from the Ichimoku Cloud well above the stop price.

That’s it for this week. I will keep the updates coming. Be sure and let me know if you have questions or comments. Thanks!

Dean Jenkins

MBA from the University of Washington. Dean is an expert in Technical Analysis, Money Management, Elliott Wave Analysis and founder of FollowMeTrades.com

Well, if there were any doubts about the Oil recovery, hopefully those have been put to rest. We initially called out $37.09 (on the Crude Oil Futures contract) as the trigger level that confirmed the recovery in Oil was underway. That was back in early March, six weeks and 12% worth of gain ago.

And it is highly likely to continue up to the projected levels of $63 – $84. It won’t go straight up, but the Technicals are clearly pointing to those levels through this year and next.

We called out a few potential Oil trades as this was playing out;

WLL: Initial entry was $8.57, Initial stop of $3.33, target of $17.25. We got an entry on that and it is now at $10.84, a 26% profit so far! It is on its way to the target and stop has been raised to $6.56. Very nice!

USO: Entry was at $10.25, initial stop at $8.13 and a target of $15.75. We got the entry and are at 2% profit with the projection still looking great.

TOO: Entry was at $6.79, initial stop at $2.62 with a target of $16.09. We got our entry and current price is $6.82, a profit of 2% so far. Stop has been trailed up to $4.73.

These trades still look great and there is a high probability of them hitting the targets for really impressive profit. Enjoy this complimentary video on Projecting Price Targets.

If you like these updates on Oil and the specific trades, be sure to let us know and we will continue to provide updates.

Oil has reversed from the minor pull back that has been in place for the last few weeks and turned sharply back up, as expected. The case for the corrective uptrend in Oil just gets stronger and stronger. If Oil takes out the last high of $42.63, look out, it is going to get very interesting. All three Oil trade ideas that we suggested; WLL, USO and TOO still look strong.

We had a couple of levels for Oil to go through to confirm the corrective wave up. First was $37.09, and then if there were skeptics, we said $39.03 should put all doubts to rest. We are at $41.01 as of this writing and no doubt remains – the recovery is on.

The targets for Oil remain $62.97-84.87 on the Crude Oil futures contract. Of course, that will take sometime and there will be rallies and pullbacks (Higher Highs and Higher Lows in Dow parlance) along the way. But the evidence is in and the high probability is that it is happening.

I called out a few trades that were good candidates to trade this recovery/corrective wave. WLL had an entry price of $8.57, initial stop of $3.33 and a target of $17.25. The entry was hit and I am in this trade. If new highs are put in, then I will trail the stop up to previous lows. USO had an entry price of $10.33,which was also hit. The stop is $8.10 and I will trail that up as well as new highs are put in.

A new trade idea for this update is TOO (Teekay Offshore Partners.) The fundamental people would cringe at this, but we are technical traders and the Technicals are great! We don’t care why it is going up, just that it is. It could be just a short covering rally and that is fine. The initial entry is just above previous resistance at $6.79, initial stop at $2.62 and a target of $16.09. If new highs are put in, then I will trail the stop up to previous lows. The reward/risk ratio on this is awesome and makes this trade worth taking a look at.

This promises to continue to be exciting (and profitable!) and I will continue to provide updates.

In the first Oil post, I said “if Oil futures go up through $37.09, the recovery is on.” In the second post, I said “Oil recovery is a go!” after it went through that level. And, I said pullback would be normal before going on to make new highs.

It is playing out in textbook fashion! If the latest high of $39.03 gets taken out, then that just makes the case for a corrective wave stronger and stronger.

Also in the last post, we looked at WLL (Whiting Petro) as a good stock to play Oil with. $8.57 was the trigger level to get in at. That triggered and this trade still really looks good. Entries are still possible. Initial stop is at $3.33 and the target price is $17.25. USO (Oil ETF) was another potential trade. Entry is good right now. Waiting for another high to be put in at $10.33 is a conservative way to play USO. Initial stop is at $8.10 and target is $16.00.

The profit potential on the Oil recovery and these picks are really, really good and it is going to be fun to update them. I’m looking forward to it and will provide a few updates per week.

Would you mind paying more for gas at the pump, if you were able to make massive profits in Oil related trades? If we play this right, not only can we buy all the gas we want, we might just be looking at a brand new car!

In my last update, a few days ago, I said that if Crude Oil futures went up through $37.09 with some good momentum, then that would be a clear signal that the recovery in Oil was underway.

Well, it happened and I stand by my analysis. I think the Oil recovery is a go.

There are several ways to trade the recovery in Oil. Of course, you can just go long on the futures contract, but that takes a pretty large account to hold contracts overnight and beyond. And it carries more risk. I am trading Oil with stocks and ETF’s.

WLL (Whiting Petro) is an Oil related stock that I like a lot. It is low priced but trades with really big volume. I’m looking at an entry of $8.57, with an initial stop of $3.33. If WLL moves with Oil, as it has done so far, we could be looking at a 2X or 3X trade in a relatively short timeframe. Works for me!

If you don’t like low priced stocks, USO (Crude Oil ETF) might another way to play this. I’m looking at an entry of $10.25, with an initial stop of $8.13. USO has huge volume and a very active option market as well. Whatever option strategy you like for a bullish trend play should do really well.

I’ll continue to provide updates a few times a week. I’ll update the price pattern on Oil Futures, the two trades that I called out here, and I’ll add a few more plays as this works its way out.

It’s no secret that Oil has been in a massive decline. From over $120 per barrel in 2012 to less than $30 in 2016.

The big question is, “what’s next?” Will Oil continue down or will it head up? If we can correctly call the correction in Oil, we can get some REALLY profitable trades! But if we jump in too soon and are wrong, we lose.

Some simple technical analysis can give us the answer. We don’t have to load our charts up with too many whizzy indicators to read this one. Simple Dow Theory, with a simple Elliott Wave count can give us the answer.

Recall what Dow theory says; “a down trend is defined by Lower Lows and Lower Highs.” We’ve seen that for a long time on Oil. When that pattern is broken, when we take out a Lower High and put in a Higher High, that means something, it usually signals a change in trend, or at least the beginning of a corrective movement.

Elliot wave says that price moves in a series of impulsive and corrective waves. Elliotitians can argue all day long about the specifics of wave counts, but there is no debate that Oil has been in an impulsive Bearish wave for some time now. At some point, we will get a corrective wave up. Dow theory can signal when that is happening.

When (not if!) the corrective wave begins, then the current Fibonacci range for that is 38.2% – 61.8%, or $62.97 – $84.87 on the Crude Futures Contract. That is a massive move from current prices and there will be some REALLY good trades in Oil Futures, ETF’s and Oil related stocks.

Does this method of analysis work? Well, nothing is perfect…but using the same technique, we called the recovery in Gold. We said that when Gold futures crossed $1113, the recovery was on—and man is it! Oil could do the same thing. If it crosses $37.09 with authority and momentum (not just a few ticks,) then Oil is on as well.

We’ll provide regular updates as this plays out and if the recovery begins, we will call out some specific trades.